This is why the "piracy" term is confusing (intentionally so). If I "pirate" an object, it's implied that someone had the object and now that someone doesn't. But that is not the case when I "pirate" a virtual object.

A more correct example uses what I call the "magic duplicating machine" which, when pointed at any object, creates, for no cost, an exact duplicate.

So, back to the (bad) example:
I am in a cafe. JK is sitting there with a $5 bill in her pocket. I point my magic duplicating machine at the $5, and now I have $5 too. JK still has her $5. She has incurred no obvious loss. She's probably unaware of that it even occured. (Of course, now the G-Men will be raiding me for counterfeiting - but that's another story.)

When it comes to her book, the only loss that JK incurs is loss of copyright. She is no longer in control of copies of her work. And you rightly point out: had she met the market demands and produced an eBook, she would have incurred a much smaller loss.

"Loss" in this instance is an monetary term. It does not apply in this case. There cannot be any loss. She made the decision that her income from the ebook version would be zero.

Let me give an example. I decide to make ten chairs. I sell 8, one is broken in the store, and one is stolen. I have had a loss of two chairs.

Her ebooks have sold zero copies. She has earned zero pounds from them.